Forums member afterfl0w has written up a nice graphical analysis for GTA IV. I found it very interesting to read and decided to have it showcased on the main page. In the article you'll learn about some things that Rockstar really did right, and some glitches or things that need to be fixed. There's a great amount of attention to detail in the screenshot descriptions. Here is an example:

I'm positive that the fact that the wheels of the cop car are clipping with the ground has been mentioned, so I won't bother. They messed up a bit there, as the car didn't even shift its weight as it went onto the sidewalk. I'm sure it'll be fixed, the car models aren't complete yet.

So, what's good about this shot? Again, the tires. Absolutely perfect. You can see what I mean a bit better in this shot. They're just 100% ace, even better than most racing games (which is embarrassing for them). The road looks great, and even small details like the tire of the car is compressed a bit on the road, as it has weight. Another important thing here is the car is NOT floating above the road in any way.

In most modern-day engines, the characters, models, props, vehicles, all float above the ground, even sometimes ever-so-slightly. Most of you have seen this before, and know what I mean by it. In GTA? They're touching, interacting with the ground. They have weight, and this is going to affect how realistic the entire city feels.

A thin green band around the minimap on your HUD indicates your health. (Could a second band be added to indicate armor?)
Physically, Liberty City is not as big as San Andreas. It covers approximately 3/4 the total area that San Andreas did.
Software glitch or innovative gameplay? During the final bit of the game that PSM got to see, Niko is killed by a police copter landing on his head.
Playstation Magazine confirms the [default] camera angle shift in GTA IV. Your view is no longer stuck hovering over the vehicle. When you get behind the wheel, the camera drops down and to the left, following the middle of the road.